[Beta 3][Bug][Gameplay] Building tiles wont delete!

http://dl.dropbox.com/u/8286385/Elemental_1278108183.jpg

Built a level 2 city almost hit level 3 however i need more housing and i used all my improvment tiles.  Went to delete something and im getting an error (see screenshot below).  This is the case with any tile i select.

 

http://dl.dropbox.com/u/8286385/Elemental_1278108183.jpg

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I was just about to report that as well; it seems that the "contiguous city" algorithm needs a tweak.